STATE loan to RADIO COMPANY

Sun (Auckland), Volume 1, Issue 114, 4 August 1927, Page 15

STATE loan to RADIO COMPANY

government action prime MINISTER’S DEFENCE (THE SUN’S Parliamentary Reporter.) WELLINGTON, Wednesday. ItHE loan °T £15,000 by the Government to the New Zealand Broadcasting Company, which was the subject of a question in the House recently, was commented on strongly by several members today, when the Postmaster-General, t u e Hon. W. Nosworthy, replied to Mr. H. E. Holland. do persistent were the critics of the Government’s action in lending public money to a private concern, that the prime Minister, the Right Hon. J. G. Coates, arose to place the Government’s side of the question. Several attempts had been made to form companies, he said, the first comprising people entirely outside of Wellington. and it was only after several attempts had been made that the New Zealand Dairy Company had asked for a licence to erect a station at Auckland. This raised the question whether the Government would grant indiscriminate broadcasting licences, or restrict the field to definite points in the Dominion. Experts were of opinion that the licences should be restricted to certain centres. BoAßD QF ADV|SORS This led to the formation of the present company which, at the time it approached the Government, wanted to erect three additional stations, one of which was at Wellington. The Government was then faced with the question of a company which sought to fulfil the general need. Personally he was not aware whether the original board of advisors which had been established existed now. , Mr. R. McKeen: It has never met. Mr. Howard: There is no board. Mr. Coates: Oh yes. it met. We used to meet several times a week at that time. Mr. Howard: It is an unofficial board. Mr. Coates: It was intended that this should to some extent be the board to control the matter. Mr. McKeen: Has the board met since August last year? Mr. Coates: I am not aware of that. Mr. McKeen: The listeners-in say \there is no board. Mr. Coates: I know that the listen-ers-in are very concerned. I have met many of them. But the general opinion is that if the company gives good service everyone will be satisfied. Mr. J. A. Lee: Why lend public money to a private body?/ Mr. Coates: It is true that Cabinet agreed to lend the company £ 15,000 at 6 per cent. Repayment is to begin in three years, and the money is to be repaid by the end of the contract. Mr. T. M. Wilford: Is this not a precedent? STATE'S SECURITY Mr. Coates: Well, it might be; but it is something the same as we have done to - coal-mining companies and goldmihing companies, and in some respects to local authorities. The Government insisted that the size of the station to be erected should be large enough not only to serve Wellington and New Zealand, but able to communicate with the whole South Pacific at any time of the day or night. This upset the financial arrangements of the company, and it has now erected a station 10 times more powerful than the Christchurch one, This is in case any national or international emergency occurs demanding the use of the station. That is why the Government agreed to lend the money. Mr. Wilford: Is it first or second mortgage ? Mr. equipment or anything else. Mr. Wilford: Before the banks. Mr. Coates: The security is the plant and the income of the company, also its assets. Mr. McKeen: The bank overdraft will be first charge. Mr. Coates: The first call will be on the whole four stations. I cannot see any danger in this, provided the company gives a good service. Mr. G. W. Forbes: What guarantee have you of that? Mr. Coates: The company has guaranteed that. Mr. Forbes: Have you any control? Mr. Coates: Yes, considerable control. We have followed the precedent followed in other countries. We are anxious to see broadcasting well regulated and well carried out. We think the day may come when the Government will have to take it out of the hands of the company, and control it by a board. Mr. H. E. Holland: Is there any arrangement to safeguard the people in this respect? Mr. Coates: Yes; we have certain rights and the company has to comply with certain things.